Discussion paper

DP17071 Understanding the Reallocation of Displaced Workers to Firms

We study job displacement in France. In the medium run, losses in firmspecific wage premium account for a substantial share of the overall cost of displacement. However, and despite the positive correlation between premium and productivity in the cross-section of firms, we find that workers are reemployed by high productivity, low labor share firms. The observed reallocation is therefore productivity-enhancing, yet costly for workers. We show that destination firms are less likely to conclude collective wage agreements and have lower participation rates at professional elections. Overall, our results point to a loss in bargaining power.

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Citation

Paul, B, C Hemet and C Malgouyres (eds) (2022), “DP17071 Understanding the Reallocation of Displaced Workers to Firms”, CEPR Press Discussion Paper No. 17071. https://new.cepr.org/publications/dp17071